Enter the gateway

Call it what you will--an access point, a cable/DSL router--the gateway has arrived for home networking and broadband aficionados. Gateways are typically switching/routing devices that don’t have WAN/broadband access ports and connect computers and other peripheral devices together for home networking. Currently, gateways use wireless and Cat. 5 media types, and to a lesser extent power line and phone wire media types. Gateways are increasingly being placed behind primary broadband access devices (like cable modems and DSL modems) to share cable or DSL Internet bandwidth among different users within a residential or business premise. In this capacity, the gateway must also serve as a security device, providing network address translation (NAT) or firewall functions, such as stateful packet inspection, to prevent sophisticated hacking. Some gateways also support IPSEC VPN tunnels to allow telecommuters and day-extenders remote access to corporate networks of small and medium-sized businesses.

Vendors of gateway products include Linksys, NETGEAR, US Robotics, D-Link and other smaller players. Rumor has it that Efficient Networks (now owned by Siemens), the largest worldwide supplier of DSL modems, is looking at entering the gateway market. They would sell directly to incumbent service providers with large installed bases of residential DSL subscribers. These subscribers are anxious to distribute Internet bandwidth among multiple users in their households.

Broadband subscribers are the primary candidates for first-generation gateway products designed to distribute Internet bandwidth and other data-only applications. The only question for gateway vendors is, “How fast is the subscriber base growing?” Though broadband subscription growth in North America fluctuates from quarter to quarter, RBOCs and cable operators consistently report double-digit broadband subscriber growth.

Measuring unit shipments of broadband modems gives a good indication of broadband subscriber growth, and in turn, the potential growth for gateway devices. In Q2 of 2002, worldwide unit shipments of ADSL modems grew 7% to 2.8 million, with North America accounting for most of the growth during the quarter. Worldwide unit shipments of cable modems grew 17% to 2.2 million in Q2 of 2002, with North America once again providing most of the growth. For CY 2002, worldwide ADSL modem shipments are forecasted to total 11.8 million, and worldwide cable modem shipments are forecasted to total 9.3 million. The numbers don’t lie: clearly, broadband is here to stay and gaining more momentum every quarter.

In some cases, the different gateway functionalities are being integrated into broadband modems and other WAN/broadband access devices so that users do not need separate gateway devices. In the end, users have two product choices: a separate gateway device that attaches to their existing WAN/broadband access device, or an integrated access device that provides a mix of access, networking and security features.

For the most part, gateway and WAN/broadband access vendors are addressing data-only home networking solutions on wireless, Cat. 5 and existing wire line media types, but a new trend is emerging for supporting in-premises distribution of high-speed multimedia (data, voice, audio and video) with guaranteed quality of service (QoS), a must-have requirement for multimedia delivery. Wireless solutions have major security and Internet piracy problems, and are inherently bad for multimedia, so end-users and service providers will have to consider existing wireline alternatives. The existing wireline media types include power line, phone wire and coax cable, and can inherently meet the security, high bandwidth and guaranteed QoS requirements for multimedia delivery.

There are four distinct categories of consumer/business products that are candidates for the integration of multimedia distribution: computers, set top boxes/personal video recorders, broadband access modems/routers, and gateways. So far, vendors of modems/routers are leading the charge, but vendors of all the aforementioned product categories are actively seeking multimedia solutions that are not so easily found. These solutions are not being developed by the box vendors, but instead by silicon manufacturers such as Broadcom and Conexant, which are currently addressing distribution of data-only applications on existing media types such as phone wire and power line. These silicon vendors hope to deliver their chipsets to all the usual suspects--access and gateway manufacturers--and also to a company called Microsoft, a not-so-usual suspect, that is aiming to extend the PC’s capabilities to deliver home entertainment as part of their eHome strategy.

The problem of distributing multimedia with guaranteed QoS on wireless and existing wire line media is not trivial, and soon all box manufacturers will be clamoring for a solution that supports the in-premises distribution of multimedia content from telcos, cable operators, and satellite providers, all of whom are competing for data, voice, and video subscribers. Semiconductor manufacturers will have to quickly develop multimedia chipsets to evolve the gateway and other devices to the next generation of products that will offer security, high bandwidth, QoS and ease of deployment, the keys that will open the gateway to multimedia paradise.

Jon Cordova is Directing Analyst for Access Networks at Infonetics Research. He can be reached at jon@infonetics.com.